Unequal economic development in China: spatial disparities and regional policy reconsideration, 1985-1995

Abstract

Almost two decades into the implementation of Deng Xiaoping's 'get rich first' policy and 'coastal development strategy', income inequality and an imbalance in regional development have emerged as two of the most disturbing factors affecting contemporary China. This paper examines regional disparities in contemporary China and their changing trends and magnitude, based on a time series analysis of data sets for income and production across China for the last 10 years. This paper focuses on the examination of Gini-coefficients and coefficients of variation for two key economic indicators: GDP per capita and household income per capita at four levels of geographical aggregation - provincial, regional, urban and rural. Given that Chinese policy makers appear to have been strongly influenced by the two western theories of regional development (Williamson's inverted-U hypothesis and the centre-down paradigm), this paper includes a brief review of the two theories in a global context. The findings of this research suggest that these two western regional development theories are rather ineffective and potentially detrimental when applied to China. It is time for Chinese policy makers to reconsider their existing prevailing 'get rich first' policy and 'coastal development strategy', and to focus more on the development of the inland regions.